State Pension CUT as pensioners get £177 less – ‘kicked while they are down’

Life is already tough for pensioners as gas and food prices soar but next year is going to get even harder. Most pensioners rely on the State Pension to maintain their spending power but its value is going to fall in real terms as prices rocket.

Sunak’s decision to scrap the earnings element of the State Pension triple lock will hand pensioners a rise of just 3.1 percent next April.

Yet the Chancellor said in Wednesday’s Budget speech that inflation will hit 4 percent, which will more than wipe out the increase.

This means the State Pension will effectively fall by 0.9 per cent in real terms, warned Tom Selby, head of retirement policy at AJ Bell.

This translates as a cut of around £1.20 a week for those on the old basic State Pension, or £62.40 a year.

Those on the full new State Pension will see their spending power fall by £1.60 a week, or £83.20 a year, Selby added.

In practice, they could lose more than twice as much.

Sunak underestimated just how high inflation is going to be, with the Office for Budget Responsibility publishing new figures showing price growth will hit a thumping 5 percent instead.

That would hit pensioners with a pay cut of 1.9 percent in real terms, after taking into account the 3.1 percent triple lock rise.

Selby said the current new State Pension rate of £179.60 a week will be worth just £176.19 a week in real terms in that case.

This is £3.41 per week less which adds up to a total loss of £177.32 a year.

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Worse, pensioners spend a higher proportion of their income on basics such as food and fuel, which are rising fastest.

Cameron said: “The cost of living crisis will hit pensioners disproportionately hard.”

Higher inflation will hammer pensioners living off their savings, said Victoria Scholar, head of investment at Interactive Investor. “Savings rates remain so far behind inflation that any rise would make little difference to the appeal of keeping money in cash.”

Best buy easy access accounts currently pay around 0.65 percent. It would take 14 base rate rises of 0.25 percent for this to beat inflation at four percent,” Scholar said.

Once again, pensioners lose.